Is Tether’s Centralized USDt Market A Cause For Worry? 104 Wallets Control 70% Of The Supply
Tether the parent company behind the leading stablecoin in the cryptocurrency market USDT has been at the center of the ongoing controversy regarding its role in manipulating Bitcoin prices. Now the on-chain metrics of tether revealed another worrying stat which suggested that 70% of the total market supply of USDT is controlled by just 104 accounts.
IntoTheBlock recently conducted an analysis of Tether’s on-chain transactions which revealed several interesting stats for the controversial stablecoin. The analysis found out that 104 wallet addresses for Tether contain $2.2 billion worth of USDT which is equivalent to 70% of the total market supply of USDT.
Apart from those figures the study also found that a trader holds USDT for an average 17.8 days only which should not be surprising as it is mainly used for liquidity purposes only. The study also found that the number of large transactions in USDT has seen a significant bump in recent times. The total volume of transactions above $100,000 has peaked at $2.4 billion in the last 7 days.
Tether has Maintained its Dominance despite the Ongoing Controversy
Tether has been involved in a long-running case with the New York Attorney General Office after they found out that Bitfinex used $750 million of Tether’s reserve to cover their yearly losses. Despite the ongoing case Tether has maintained its dominance as not only the leading stablecoin on the market, but it has also been registering higher daily trading volume than Bitcoin itself.
The rising volume of high-value transactions also paints the dominance of Tether in the market. However, the concern should be regarding the high level of centralization in the market supply of USDT as it is a proven fact now that USDT is not backed by 100% in US dollars. Tether went back on their claims of being completely backed by the US dollar and reported that only a certain percentage of their reserves are backed by the US dollar while the rest works like a fiat model where the consumer trust Tether to back the USDT.